President Trump begins ACA repeal with executive order

One of President Donald Trump’s first official acts was signing an executive order (EO), in essence beginning the repeal of the Affordable Care Act (ACA) (P.L. 111-148) on January 20, 2017. It further gives executive agencies and departments the authority and discretion to, to the maximum extent permitted by law and in compliance with the Administrative Procedure Act (APA), waive, defer, grant exemptions from, or delay the implementation of many ACA provisions and requirements. That same day, the president’s chief of staff instituted a regulatory freeze pending review to all executive agencies and departments. The full text of the EO is reproduced in this Report in the New Developments at ¶9524.

Executive order

The EO, which has the full force of law but is subject to judicial review, states that while the Administration is seeking the prompt repeal of the ACA, the Executive Branch must ensure that the law is being implemented efficiently and take steps to minimize the economic and regulatory burdens of the ACA. It also previews the Administration’s view of what an ACA replacement may look like, directing executive agencies and departments to make preparations to give states more flexibility and control of the health care market, including encouraging health insurers to provide policies across state lines.

ACA burdens

Under the EO, the Secretary of Health and Human Services (HHS) and the heads of all other executive departments and agencies with authorities and responsibilities under the ACA—that is, the Departments of Labor and the Treasury—are directed to use all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose

1. a fiscal burden on any state;

2. a cost, fee, tax, penalty, or regulatory burden on any of the following:

Practically speaking, this means that the Secretaries of HHS, Labor, and the Treasury are required, as permitted by law and in accordance with the APA, to do everything in their power to end implementation of the ACA, including provisions covering the individual and employer mandates, Medicaid expansion, contraception coverage, changes to Medicare payments, the medical device tax, and more. However, the EO does not repeal the ACA, which must be done by the legislature, and major changes will require notice-and-comment procedures to revise regulations.

State flexibility, open market

The remainder of the EO deals with making agency preparations for certain changes to health care programs and the health insurance market that the Trump Administration will likely try to include in future laws to replace the ACA or otherwise reform health care and insurance. First, executive departments and agencies are directed to exercise available authority and discretion to provide states with cooperation and greater flexibility in implementing health care programs. This would affect state Medicaid programs and Children’s Health Insurance Programs (CHIP), including section 1115 waivers. The change aligns with policies announced by Trump during the campaign and presidential transition period, as well as those of Congressional leaders and Trump’s nominee for HHS Secretary, Rep. Tom Price (R-Ga). Department and agency heads with responsibilities relating to health care or health insurance are also required to encourage development of “a free and open market in interstate commerce” for both health care services and health insurance. According to the EO, the goal is to achieve and preserve maximum options for patients and consumers. Selling health insurance across state lines has been a talking point for Trump, as well as House Speaker Paul Ryan (R-Wis) and other members of Congress.

However, this directive could also impact the Federal Trade Commission and Department of Justice, for example, as four of the nation’s five largest health insurers are pursuing mergers. (Executive Order, Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, January 20, 2017.)